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2X OPTIMISTIC = STARTUP TROUBLE -- Part of a series: "BUILDING A BICYCLE WHILE RIDING IT -- Why Startups Are So Darn Hard To Manage"

2X OPTIMISTIC = STARTUP TROUBLE

The Rule of 2X dominates startups.

In a startup, everything seems to happen twice as fast as in larger, older companies. Faster up and faster down.

Like other startup founders, during my first effort, I quickly learned that each major task was taking twice as long to accomplish, moved ahead as half the speed desired, required twice as many people to do it, produced half the results, consumed twice the energy expected and ran half the speed aimed for.

And 2X occurred with positive and red-hot results, such as when sales finally caught on with our first products and growth was double the rate we expected. We felt like taking off on a rocket.

Not every moment will be in the extreme. A lot of days will be simply “okay” with others “not bad”.

But there will be days of nothing but hell breaking loose.

Fortunately, there can be enough wonderful moments when entrepreneurial optimism is validated with spectacular results, and then everyone enthusiastically celebrates.

Unavoidable

I’ve found entrepreneurs are ever-optimistic, living enthusiastically, with the glass always looking nearly full. It will all work, turn out great. They are confident that their startup will overcome all odds, and emerge victorious. That’s one reason I always enjoy working with them. I’m convinced that attitude is required, and if you don’t have it, then don’t do a startup.

 2X means you’ll run into the unexpected most of the time. I’ve found that your most challenging encounters will be frequent, intense, and never arrive at a good moment: the technology is a dud, key contracts are not signed, initial sales quickly slump, star employees quit, thefts of technology happen, investors change their minds, or a health pandemic arrives.  Or your product is such a hit that your people cannot deliver fast enough, the news goes viral in your favor, and venture investors line up to finance your growth. On and on and on it goes along the startup roller coaster trail. And it will. For every startup. Yet the extra optimism remains. It’s part of what I’ve seen in startup leader after leader, over decades of new enterprises around the globe, in all sorts of industries.

Tip: Because of those experiences, I and other veterans advise you to expect and respect that hyper fast-paced roller coaster as you prepare to make key business decisions. Apply an extra dose of wisdom: respect the existence of your inherently optimistic startup mindset and adjust your decision-making accordingly.

Get Prepared

There are lots of ways to prepare for the impact of the wild swings of big encounters in startups lead by uber-optimistic leaders.

Here is one simple example, it’s about raising money for a startup.

In his book “Explosive Growth”, Cliff Lerner, co-founder of SNAP advises startup leaders to think before bad happens. He uses a helpful technique: Prepare by imagining an event and how you’d react to it. Before it happens. That’s because he believes “Fear of the unknown is a destructive force.”  

He goes on to write of an example of the 2X rule that he experienced; he said #ExplosiveGrowthTip2: “Once you’ve figured out how much startup capital you need, double it.”

I’ve found serial entrepreneurs and their experienced investors agree.

BOTTOM LINE: Respect your entrepreneurial optimism. Expect to ride a wild rollercoaster. Accept that you will not be able to time the arrival of the extreme encounters. However, before they arrive, experienced startup leaders think through the extremes and then decide how they will react. You can also.

I wish you The Best on your Adventure!

JOHN

 

 

 

 

STARTUP COMPLEXITY ARRIVES – TIPS & TRICKS TO COPE -- Part of a series: "BUILDING A BICYCLE WHILE RIDING IT -- Why Startups Are So Darn Hard To Manage"

STARTUP COMPLEXITY ARRIVES

Your startup will encounter complexity, sooner than you expect it.

That encounter will trigger huge emotional responses in you and people you trust.

Here are some tips and tricks to help you cope when startup complexity arrives.

After the first product is launched, growth begins – that’s the good news.

The challenging news: With growth comes unavoidable complexity that often turns the fun startup into a distressing mess that triggers the worst fears and behavior of employees and especially first-timers.

Complexity is a huge challenge to founders who are inexperienced in managing groups. Most can figure out how to manage a handful of employees and a couple of contractors. However, soon that handful becomes eight times eight, and then a hundred more. It gets crazy, very fast. What used to be a simple organization of close friends becomes a fast-growing group of distant strangers going in many directions at the same time from many locations in your country and even the world.

Compounding the challenges will be the rise in complexity of the processes, checks, and balances, and functions. They become more and more multi-dimensional without a letup in the speed demanded during the construction of your startup.

Encountering such rises in complexity sends signals to the company’s leadership that it needs to urgently make even more changes that ensure growth continues. More hired help is needed – fast – for expansion. Swift recruiting is demanded to attract more candidates – especially those with demonstrated managerial skills and know-how about how to operate dynamic, complex organizations. Near panic ensues and soon contractors are sought as desperately as full-time employees.

While all of that is going on, the CEO will have to make significant adjustments in the organization of responsibilities for those early hires where growth has outpaced their abilities. People resist such changes, they don’t like moving their positions, titles, and responsibilities. So do the founder CEOs whose dear friends are among that resistant group.

Here is an example: Slack & founder Stewart Butterfield

High growth quickly impacted startup Slack, led by serial entrepreneur Stewart Butterfield. You might think he would have been calm and cool as it happened, but wrote that it was a very troubling time for him and the company. Here is his description of how he and his management responded:

INTERVIEW of Stewart Butterfield, CEO of Slack.
Wall Street Journal, October 11, 2018

WSJ: What have you learned in your experience from Flickr to now that has helped you to run a company?

Mr. Butterfield: I would have thought that my job two or three years ago was to be smarter than everyone else and to make all of the really important decisions. It turns out that wasn’t actually the job. There might be a point like when you’re eight people, but that goes away really quickly. Now, I think about really three distinct categories. One is setting the overall vision and strategy. The second one is governance, supervisory, administrative duties. Then the last bucket, which is by far the most important, is ensuring that the organization as a whole is performing at the highest possible level.

WSJ: You’ve been growing quickly. Were there points where it has become unmanageable and you’ve wanted to slow down?

Mr. Butterfield: There was a time about 18 months ago where we really put on the brakes, mostly on the product and engineering side, because the complexity is a little bit greater there, and we wanted to make sure we actually had sufficient management and leadership capacity to keep people productive and stay organized.

BOTTOM LINE: Get ready for complexity to quickly overtake your startup priorities. As the leader, you will have to do everything faster than you want and your results will mostly be below your desired quality. It challenges even the most seasoned of entrepreneurs. But they learned how to get through the worst and emerge with their companies growing and healthy. So can you.

STARTUP CULTURE IS POWER – DOCUMENT & COMMUNICATE TO WIN -- Part of a series: "BUILDING A BICYCLE WHILE RIDING IT -- Why Startups Are So Darn Hard To Manage"

CULTURE IS POWER

Culture is the invisible guide to people getting things done in your startup.

When everyone becomes your company’s culture, people know what is needed to be done, with little need for supervision.

Serial entrepreneur Maynard Webb (author of “Dear Founder”) said:

“. . . I realized that I needed to implement practices and a culture that ensured execution happened without my direct involvement on every piece. I needed to ensure things got done without micromanaging.”

• Culture enables execution of the plan for the business to be fast and efficient, exactly what tiny startups require to thrive.

• Culture keeps people going even during terrible times. Apple fell twice into the critical care ward where it was on life support, yet the culture kept the company alive, even when its founder got fired. And it finally recovered to become the great Apple.

• Culture sets guardrails that limit moral corruption.

• Culture communicates what’s important to everyone. It becomes visible in the behavior of the startup’s people when the fledgling enterprise encounters the joys and sorrows of progressing along the startup trail.

• Culture is the soul of the new enterprise. It is the collection of passions, dislikes, and preferences of everyone, and the reasons for each person joining the startup. Values, politics, religions, morals are included. It’s big and it’s full of potential trouble – as well as goodness.

• Culture’s beginning is in the founder’s soul. It’s what she believes, what she lives for. It’s deep and does not change – until disaster requires open-heart surgery. Try Uber.

Culture + Vision and Mission

A lot of stakeholders will want to join you on your mission, that challenging quest that is based on your vision for what amazing things your startup sets out to accomplish.

The articulation of your vision and mission is about what you and they will live for, what’s central to your values and purpose in life. That’s the starting point for the successful founders I’ve worked with.

This is how the startup veterans begin, as they proceeded to craft their vision and mission statements.

• They began documenting their vision and mission in two statements, each consisting of one, or at most a couple, of simple, short sentences.
• Then they proceeded to craft the documentation of their company culture. Sometimes referred to as “core values,” they are very personal values that compose a shortlist of what is especially valued by the founder(ers) and the early employees.

Vision Creating Tool

I’ve found a handy tool that you can use for creating a vision statement and accompanying material for your vision and mission statements. It was crafted by Salesforce founder Mark Benioff[ii] and has found wide reception in startups and high-growth companies.

• VISION (What do you want?)
• VALUES (What's important about it?)
• METHODS (How do you get it?)
• OBSTACLES (What might stand in the way?)
• MEASURES (How will you know when you have it?)

Culture Statement

Just get started. Yes, it’s not easy and takes time. But it’s important to do and do it well.

To craft your company’s culture statement, simply get started and then keep editing with your staff until you are satisfied the drafted culture statement conveys the values you think are most important.

You’ll find the Internet loaded with tips and how to do this work. One that I like is Your Dictionary because it includes a list that is practical and works well.

BOTTOM LINE: Respect the power of startup culture. Veterans of unicorns did and won, big time. So can you.

I wish you The Best on your Adventure!

JOHN

 

I wish you The Best on your Adventure!

JOHN